Refinancing SFHs Held In Land Trusts - Posted by Rhonda

Posted by Todd_OH on August 20, 2003 at 12:36:37:


The way I do things is a little simpler… so hopefully you may be able to benefit from some part of this.

  1. My partners are PASSIVE. They do not get involved with the deal, other than to put up cash and/or arrange financing.

  2. We would have a partnership agreement stating who does what… i.e. they put up the initial money (via cash, obtaining a loan, etc.) and I do everything else. After a certain point we begin splitting expenses if necessary.

  3. The partner would obtain a loan in their name, and therefore be taking title in their name. Shortly after they obtain the loan, we would transfer the title to a Land Trust. This would be spelled out in the partnership agreement.

  4. Since you are doing a refi, you could quit claim the title to your partner’s name (or both of your names if you are both signing for the loan), do the refi, and then transfer title back to the land trust.

Hope this helps…


Refinancing SFHs Held In Land Trusts - Posted by Rhonda

Posted by Rhonda on August 20, 2003 at 10:49:19:

I’m in the process of putting together an agreement to partner with a private investor and enable the refinancing of two SFH (assume they were purchased with cash) and currently held in land trusts. Further, assume one home has been owned for over 6 mos. the other about 4 mos. Currently, the trustee is an out-of-state relative, the beneficiary is my LLC.

One consideration for this agreement is the proper recording and acknowlegement of the new private investor as co-owner and co-beneficiary at the courthouse and within the individual land trust agreements. Naturally, this investor will want the records to show co-ownership by his business entity…as tenants in common…and will likely agree to keep the properties in the land trust. However, a bank may become involved in the refi process (w/ the private investor acting as co-signor)…which may complicate matters.

From my perspective, (perhap faulty), it would seem that simply drafting new quit-claim deed/s to acknowledge the co-owner…and rewriting the land trusts to reflect the additional beneficiary may be all that is required. Perhaps, over simplified…but that’s what comes to mind. I’m a little more concerned about the bank refi scenario, their requirements (unknown at this time) and how they may complicate matters because of the land trust. Certainly, privacy and asset protection are desired with this whole approach. How would you approach it?

I recognize this question may not be appropriate for this forum (vs legal resources), but I thought I’d give it a shot given the knowledge, experience and excellent feedback provided by this group. I appreciate any comments/suggestions. Thxs.